Mayotte as affected by inflation as the rest of Overseas

In recent weeks, a social movement has been triggered in Martinique and Reunion against the high cost of living. If Mayotte did not follow, the subject concerns it just as much. Explanations with Véronique Daudin, head of the INSEE regional service in Mayotte.

News Flash: Can we assess the standard of living of the inhabitants of Mayotte?

Véronique Daudin : In 2018, the wealthiest 10% of Mayotte residents had a minimum standard of living six times higher than the least affluent 10%. While it was four times higher in 2011. Inequalities are growing. This is explained by a significant influx of a foreign population, we went from 46% to 52% of foreigners who themselves have the lowest incomes, this pulls modest incomes downward. At the same time, in this period 2011-2019, there was the implementation of extra remuneration for the wealthiest incomes and an increase in the minimum wage of 2% regularly with a catch-up following departmentalization.

The median disposable income of residents of Mayotte remains six times lower than residents of mainland France. And we know that 77% of the territory lives below the poverty line. This has decreased very little since the 2010s when this poverty threshold was at 84%.

FI: How do you observe the evolution of inflation in Mayotte compared to the mainland?

V.D. : Inflation figures are measured every month; in September we published the evolution of the consumer price index (CPI) for the month of August. Prices increased by 0.3% over one month after falling 0.2% in July. This fluctuation in the CPI will be analyzed according to each of the products. Over one year, prices increased by 2.4% in Mayotte. The trend is similar in Reunion (+2.7%), Guyana (+2.2%), Guadeloupe (2.7%) and Martinique (2.5%). In mainland France, the change in inflation is also significant, but it is only 1.8%. We had a jump that we observed in the second half of 2023. Until May, the annual change in prices observed in Mayotte was lower than the price in mainland France.

FI: What are the most expensive products in Mayotte?

V.D. : In Mayotte, food is the product category with the largest gap. They say that on 101^th French department, prices are 10% high compared to France, and up to 30% in food in Mayotte. It is 40% difference in Reunion and 100% in New Caledonia. This severely penalizes households, because the weight of food is the highest, it is a double penalty. It is also the presence of fresh products which makes the share of inflation the most volatile.

FI: Does the over-remuneration of salaries in the public sector have an impact on prices?

V.D. : It’s possible, but it remains very indirect. In reality, the increase in the remuneration of civil servants is a large part of salaried employment, but very few compared to the Mahorese population. This will have an impact on consumption levels. It will somehow revive the economy. Normally, when we consume more, prices fall, prices do not increase. But it can have the opposite effect depending on the type of product. In any case, this is not what causes prices to increase. In general, the revival of consumption has positive effects on the entire economy.

F.I. : Can dock dues affect prices?

V.D. : We need to think about this (see box). When we measure the impact of an economic phenomenon on its sphere, we measure it by different parts. That is to say that we will measure the economic impact through a public policy, for example, the establishment of a railway structure, or a road development. The economy of all of Overseas is structured around this dock dues. Obviously, the formation of prices includes the dock dues. It enters little into the calculations that are made. It’s difficult to extract it and say that, without it, there would be a decline, because the entire market is structured by this component. It’s like saying: “VAT has decreased, by how much will prices increase?” » It’s totally random.